Coral Reef Rehabilitation and Management Program—Coral Triangle Initiative Project (RRP INO 46421)Supplementary Document 18Subproject Appraisal for BintanIndonesia: Coral Reef Rehabilitation andManagement Program—Coral Triangle InitiativeProject

Coral Reef Rehabilitation and Management Program—Coral Triangle Initiative ProjectSubproject: MPA Management Effectiveness and Livelihoods Improvement in BintanDistrict MPA, Indonesia

Acronyms MCSIMMAFMPANCBNGOPESPMORpSOESOPUPTUSD-Asian Development BankDistrict MayorConvention on BiodiversityCapture FisheriesCoral Reef Rehabilitation and Management ProjectCoral TriangleCoral Triangle InitiativeDirectorate GeneralGlobal Environment FacilityGovernment of IndonesiahectareDirectorate of Marine and Aquatic Resources ConservationkilometerNational Science AgencyMarine Conservation and Small IslandsMinistry of Marine Affairs and FisheriesMarine Protected Areanational competitive biddingnongovernment organizationpayment for ecosystem servicesProject Management OfficeRupiahstate owned enterprisestandard operating procedureTechnical Implementation UnitUnited States Dollar

TABLE OF CONTENTSI.II.III.IV.V.VI.VII.SUBPROJECT SUMMARY. 1SUBPROJECT CONTEXT AND RATIONALE . 2A.Need for the Investment. 21. Biodiversity and Ecological Features . 22. Threats to Biodiversity and Fisheries . 73. Designation as District Based MPA. 74. Importance of tourism and livelihood support . 75. Socioeconomic Considerations . 86. Subproject rationale .10B.Subproject Objectives .10SUBPROJECT DESIGN .11A.Subproject Description .111. Institutional Strengthening .112. Biodiversity Conservation and ecosystem based fisheries management.113. Basic MPA infrastructure and livelihoods improvement .124. Project management and impact monitoring .13B.Socioeconomic Analysis .131. Livelihood Sources .132. Poverty .143. Gender .154. Social and Cultural Landscape (Indigenous Peoples / Ethnic Minorities) .15C.Social and Environmental Safeguards .181. Social Safeguards.182. Environmental Safeguards.193. Gender .19INVESTMENT AND FINANCING PLAN.20A.Cost Estimates .20B.Financing Plan .20IMPLEMENTATION ARRANGEMENTS .20A.Subproject Implementation Roles .201. Ministry of Marine Affairs and Fisheries (MMAF).202. Ministry of Tourism .213. Directorate General, Marine, Coasts and Small Islands (MCSI) and PMO .214. Technical Implementation Unit, Padang (BPSPL) - Spatial Planning for Sea, .Coastal, and Small Islands .215. MPA District Fisheries Office (UPT Bintan) – Project Implementation Unit .226. District Fisheries Office and Community Surveillance Units .237. National Science Agency (LIPI) .24B.Implementation Schedule .25C.Financial Management .281. Preparation of Annual Budgets and Work Plans .282. Accounting, Financial Reporting and Audit Arrangements .28D. Procurement .291. Procurement Methods .292. Procurement Plan .30RISKS AND RISK MITIGATION .30INDICATORS AND TARGETS .31LIST OF APPENDICES1. Subproject Investment Cost Details

I.SUBPROJECT SUMMARY1.The Bintan Regency is internationally considered to be an attractive tourist destinationfor Southeast Asians entering Indonesia through Singapore and through Hong Kong, China. Ithas high conservation value in some areas based on its levels of endemic fauna and also beingthe natural habitat of the dugong, which is under serious threat. The Bintan Regency (District)Kepulauan Bintan covers 88,038.54 km2 of which the total land area is only 2.21% or 1,946.13km2. One of the areas with the highest coral diversity is the group of Tambelan islands with anarea of about 90.96 km2 and is the farthest subdistrict in Bintan Regency and located in themiddle of the Natuna Sea.2.Under Coral Reef Rehabilitation and Management Program—Coral Triangle InitiativeProject (COREMAP—CTI), Bintan District MPA plans to undertake an investment of over 4.20million and Rp4.95 billion over a period of five years (2014-2018) to enhance managementeffectiveness and environmentally sound tourism. The Bupati has declared the seriouslythreatened dugong to be a flagship of Bintan and efforts supported by GEF and UNEPpreviously have achieved the establishment of a seagrass sanctuary on the eastern side ofBintan island.3.The outputs to achieve improved management effectiveness are: (i) institutionalstrengthening; (ii) biodiversity and ecosystem assessments regularly updated; (iii) MPAinfrastructure operational and local livelihoods enhanced; and (iv) project management andmonitoring. Tourism based revenue streams, including fees and charges are to flow towardsincreasing financial sustainability of MPA operations. In particular, Women’s groups that havedone exceedingly well under COREMAP II, such as POKMAS Bandeng in Malang Rapatvillage, are to receive continued support to expand, diversify, and link up to external markets,thus boosting revenues for the members of the POKMAS.4.In addition, it is estimated that investments will generate incremental benefits for at least300 households involved in tourism related activities and mariculture by 2018. Furthermore, by2018, coral reef and ecosystem health is expected to evidence enhancement of live coral coverin protected zones increasing to above the average of 50%, reduction in coral damage fromdestructive fishing practices and maintenance of density of coral reef fish and mangroves wherethese currently appear (baseline of 2010-2014).5.Under COREMAP—CTI, the investments are to be sourced from an ADB loan, GEFgrant, and the Government of Indonesia. Investments in Bintan are expected to contribute tooverall objectives of COREMAP—CTI. By 2018, it is expected that baselines of biodiversity andecosystem health will be updated and monitoring data uploaded on a website, nature basedtourist numbers increased, tourism revenue streams consolidated, and dugong managementplan implemented. Investments under COREMAP—CTI are expected to leverage private sectorfunding under corporate social responsibility (CSR) and, if possible, a payment for ecosystemservices (PES) to maintain dugong habitat and increase population numbers.

2II.SUBPROJECT CONTEXT AND RATIONALEA.Need for the Investment6.The total area of Bintan Regency is recorded at 88,038.54 km2 of which the total landarea is only 2.21% or 1,946.13 km2. The largest subdistrict is Gunung Kijang with 344.28 km2.Tambelan subdistrict is the smallest in area at about 90.96 km2 and is the farthest subdistrict inBintan Regency. This area is a group of islands located in the middle of the Natuna Sea.Tambelan has high coral diversity, but is vulnerable to the use of explosives for fishing activitiesin the area. Bintan consists of 240 large and small islands but only 39 islands are populated andthe remaining though not yet populated, are under agricultural crops.1.Biodiversity and Ecological Features7.In 2008, a baseline survey was conducted to estimate condition of live coral bycategories in the Gunung Kijian and Bintan Pesisir subdistricts, the details of which have beendocumented in the table below. The baseline data needs to be updated.Table 1. Condition of Coral Reefs in Gunung Kijang and Bintan Pesisir Sub-districtsAreaIIIIIIIVVNo. of Station7101365Dead coral with algae59.9161.7252.870.9576.99Dead coral1.691.134.252.311.03Non AcroporaLIVE CORAL BY CATEGORYLive coral29.2129.7737.127.8514.85Coral encrusting21.439.4215.5311.7621.46Coral branching14.2911.638.205.8814.29Coral foliosa14.299.3914.6511.7614.29Coral massif14.2923.2817.5017.6514.29Coral submassif14.2912.7115.8317.6514.29Coral mushroom7.146.518.275.887.14Coral .1312.365.105.887.13Acropora encrusting0.008.664.905.900.00Acropora submassif0.001.943.405.880.00Acropora digitata0. tabular7.144.084.6111.767.14DIVERSITY roporaCoral helioporaAcropora branchingSource: CORMEMAP II Bintan District. 2008. Jakarta. Ground Check.8.Along the northern coast of Bintan Island a recent survey of five reef sites were carriedout to determine the most recent condition of the benthic and fish communities.1 Fourteen yearsof resort development on the island have elapsed since the survey in 1993 and the survey used1Loke Ming Chou et al. 2010. Temporal Changes in Reef Community Structure at Bintan Island (Indonesia) SuggestNeed for Integrated Management. Honolulu. Vol. 64, no. 1:99–111.

3several diversity measures to compare the reefs then and in 2007. Abundance of hard coralsand fish remained high (average of 50% coral cover and 0.7 fish/m3), but taxonomic richnesswas compromised. In 2007-2008, the most common taxa accounted for greater proportions offish counts at all sites and of coral cover at three of four comparable sites. These shifts in coraland fish assemblages may be explained by freshwater influences and development along thenorth coast of Bintan Island. Because the local community and tourism industry still rely heavilyon the reefs, implementing a comprehensive, integrated coastal management plan may mitigatefurther reef declines and promote sustainable use.9.The 2008 baseline conducted by COREMAP II also extends to information presentedseparately for Tambelan subdistrict, the details of which have been documented in the tablebelow. The cluster of coral reefs found in Tambelan Islands are fringe reefs and submerged reef(gosong) with the average range covering 31,261.8 km2. Based on observations, there are 181species of stony corals belonging to 18 genera. Live coral cover ranges from 10%-90% with anaverage of 47.39% so that the live coral reef area is estimated to reach 14,815 km2. Reef fishspecies found in these waters are among others: Pomacentrus moluccensis, Lutjanusdecussates, Amblyglyphidodon curacao, Chaetodon octofaciatus, Paraglyphidodon nigrosis,Abudefduf sexfaciatus, Thalassoma lunare. In addition, mega benthos is also found, namelyAcanthaster planci, Diadema setosum, and clams.Table 2. Condition of Coral Reefs in Tambelan Sub-districtAreaIIIIIV155414.9234.0938.177.79Dead coral %28.6711.7219.6754.78Live coral %49.9232.2535.6027.02Coral encrusting14.2912.5311.769.42Coral branching11.638.205.8814.29Coral foliosa9.3914.6511.7614.29Coral massif23.2817.5017.6514.29Coral submassif12.7115.8317.6514.29Coral mushroom6.518.275.887.14Coral meliopora0. heliopora1. branching12.365.105.887.13Acropora encrusting8.664.905.900.00Acropora submassif1.943.405.880.00Acropora digitata3. tabularAcroporaNon Acropora8Dead coral with algae %LIVE CORAL BY CATEGORYNo. of stationII4.084.6111.767.14Diversity Index3.533.002.742.55CSI0.320.300.310.22Source: COREMAP II Bintan District 2008, Riau University 2008, and Ground Check.10.Of particular importance is also seagrass as dugongs feed on these. Tables belowdocument the status of seagrass as at baseline in 2008 in the Bintan subdistricts. Not all areashave high cover and community efforts with GEF and UNEP support was undertaken in Trikora,

4eastern Bintan to establish a seagrass sanctuary.Table 3. Percentage Cover and Diversity of Sea Grass Species in Gunung Kijang, BintanPesisir and Tambelan Sub-districtsAreaTransect No.Cover (%)CategoryDiversity w1.73LowTambelanSource: COREMAP II Bintan District 2008, Riau University 2008 and Ground Check.11.A Seagrass Sanctuary has been declared near the village of Penduang, which ismanaged by the local community. The sanctuary was initiated by Trikora SeagrassManagement Demonstration site (TRISMADES), a project aimed to safeguard the seagrassecosystem in east Bintan, supported by GEF, LIPI and United Nations Environment Program(UNEP). Prior to the operation of TRISMADES, the local people sometimes hunted the dugongsfor food. After a 3-year intensive campaign by TRISMADES to save the seagrass and theirassociated marine biota, the local people now appreciate the existence of the dugongs living intheir vicinity. The accidents of dugongs entering into fishermen gear, however, still cannot beavoided. The Bupati (Head of District) of Bintan has paid special attention and commitment tosave the dugongs. The Bupati has declared the dugong as a flagship animal or icon of theDistrict. A special regulation has been issued by the local government to protect this rare marinemammal. This is one area, where a potential payment for ecosystem services (PES) orcompensation agreement can be pursued/developed, wherein a partnership with anongovernment organization, private sector (resorts) and LIPI can “buy” services of thefisherfolk not to fish in dugong areas with nets and gear that are hazardous to dugongs, and inreturn the “sellers” of this “abstention” (not to exercise their traditional right) should receive“agreed” payments in a community revolving fund as “compensation” for the service provided.This needs to be further explored during implementation of COREMAP—CTI (2014-2018).12.The most recent surveys in 2010 were carried out in Tambelan, Pulau Mapur and PulauNumbing. The results are provided in tables below.

5Table 4. Coral Reef Ecology in Bintan District, 2010(Pulau Tambelan, Pulau Mapur and Pulau Numbing)Coral Fish(Number of individual/350m2)Mega benthos(Number of individual/140m2)IndicatorLive coralIndicator FishTarget FishMajor FishA planciDiadema spDrupella spLarge Giant ClamSmall Giant ClamLarge HolothuriaSmall HolothuriaLobsterTrochus spDCA (Turf Algae) FS (MacroAlgae)DC (Dead Coral) RAbiotic (Rubble, Sand, Silt, Rock)P. 000.920.330.081.0817.28%P. 8%Source: BME Ecology P. Tambelan, P. Mapur and P. Numbing, Bintan District, LIPI 2010Table 5. Abundance of Coral Fish based on Species in Bintan District 2010Pulau TambelanNoPulau MapurPulau Numbing1Pomacentrus lepidogenys# ofIndividual2,60623Pomacentrus moluccensisLepidozygus io teresChromis viridis4Caesio cuning1,290Pterocaesio tile2545Pomacentrus alexanderae1,191Pomacentrus moluccensis2146Amblglyphidodon curacao1,067Amblglyphidodon curacao1937Chromis atripectoralis910Apogon quenquelineatus15189Chromis viridisChromis ternatensis694523Pomacentrus alexanderaeNeoglyphidodon nigroris13713210Halichoeres melanurus501Dascyllus reticulatus10911121314151617181920Abudefduf sexfasciatusNeopomacentrus azysronPterocaesio tilePterocaesio crysozonaThalassoma lunareAbudefduf vaigiensisHalichoeres trimaculatusChromis weberiDiproxtacanthus xanthurusDascyllus reticulatus377334303300247213156136120110Apogon cyanosomaSpratelloides spChaetodon octofasciatusAbudefduf sexfasciatusChromis caudalisSpeciesSpecies# desCaesio carponottatusArchamia 357Source: BME Ecology P. Tambelan, P. Mapur and P. Numbing, Bintan District, LIPI 2010.Table 6. Abundance of Coral Fish based on Genera in Bintan District 2010# ofIndividual338287165109898582776965

6P. TambelanP. MapurP. NumbingGenera# of IndividualGenera# of IndividualGenera# of itidae223Pinguipedidae1Source: BME Ecology P. Tambelan, P. Mapur and P. Numbing, Bintan District, LIPI 2010No13.Mangrove ecosystems are found in Gunung Kijang, Bintan Pesisir and TambelanSubdistricts. Mangrove species that can be found are Rhizopora mucronata, Bruguieragymnorhiza, Soneratia alba, Rhizopora stylosa, Xylocarpus mluccensis, Rhizopora apiculata,Lumnitzera littorea, Heritiera litoralis, Ceriops tagal, and Excoecaria agallocha.Table 7. Density and Diversity of Mangroves in Gunung Kijang and Bintan Pesisir andTambelan Sub-districtsAreaDiversity ource: COREMAP II Bintan District 2008, Riau University 2008 and Ground Check.14.Sporadic efforts (on World Environment Day) have been undertaken to replantmangrove areas using volunteers / school children. These efforts need a systematic plan andintensive mangrove rehabilitation efforts to maintain coastal area integrity given the increaseddevelopmental activities in Bintan.

72.Threats to Biodiversity and Fisheries15.There has been a general decline of economically useful coral fish species in Bintan.Moreover, use of destructive fishing practices, such as dynamiting, is increasing destruction ofthe coral reefs. There are reports of dugongs (Dugong dugon) being accidentally trapped infishing gear / nets, particularly near villages known to have extensive seagrass meadows,although the local people try to relieve the dugong and release it safely back to the open waters.It is important to forge an alliance between local communities and tour operators / tourassociations to enter into a public private partnership (PPP) to save some of the remaining coralreef areas, dugong feeding grounds of seagrass, and the commercially useful fisheries grounds.16.There are several causes of threat to dugongs: among others it is coastal developmentthat degrades the coastal environment, habitat loss, logging and mining, land-based and seabased pollution, oil spill, destructive fishing, accidental catches, hunting, and boat strikes. TheDugong has been protected under the Indonesian Law No. 7, 1999 on the Conservation of Floraand Fauna. The law enforcement, however, is very weak. The personnel and resources toenforce the law are inadequate to cope with the large extent of Indonesian waters. Recently, adocument on the strategy and action plan for dugong conservation in Indonesia was publishedjointly by the Research Centre for Oceanography (Indonesian Institute of Sciences-LIPI) and theDirectorate for Regional and Fish Conservation (Ministry of Marine Affairs and Fisheries)(Hutomo et al. 2012). A regional cooperation on dugong conservation is also under preparationwith GEF/UNEP CMS (Convention on Migratory Species).3.Designation as District Based MPA17.The legal basis for the establishment of a Marine Protected Area in Bintan is the BintanRegency Decree No. 261/VIII/2007 (SK Bupati Bintan No. 261/VIII/2007) issued on August 23,2007. The Marine Protected Area size is 479,905 hectares prioritized to support sustainablefishery practices and marine ecotourism.4.Importance of Tourism and Livelihood Support18.Bintan can boast of unspoiled white beaches in the East, aquatic life and beautifulscenery; it has become one of the most visited islands in the area and is gradually becoming apopular tourist spot. Bintan and Batam saw huge investments and development, includingindustrial parks and large tourist resorts. Bintan has since become a popular tourist destinationdue to its close vicinity to Singapore. Bintan is located 55 minutes by ferry from Singapore, thenearest international access point and ferries leave from Tanah Merah Ferry Terminal inSingapore regularly. Currently, Singapore residents make up 47 per cent of all tourist arrivals toBintan, and 80% of Bintan visitors arrive via Singapore. Bintan has developed into an attractivetourist destination. A new, private sector financed airport at a cost of 79 million is being built,which is expected to double tourist arrivals (estimated at 470,470 in 2011) as well as facilitateinvestments on the resort island. It will enhance connectivity to resorts, which are currently onlyaccessible via ferries; it will also attract more investments in new resorts, holiday homes, food &beverage, retail and attractions, especially in the Lagoi Bay Development area. The new airportis expected to be operational in 2015 and tourist arrivals are expected to surpass current levelswith a target of bringing in 1 million tourists a year to Bintan. Resorts are aiming to attracttourists from important markets such as China and India with a flying radius of about five hours.19.COREMAP II’s most significant social impact was the empowerment of fishing

8households and women.2 Apart from the income opportunities that they enjoyed as a result ofthe project, women have substantially benefited in terms of empowerment. This empowermentis evidenced by their membership in pokmas (community group), their participation in trainingactivities, and, to a large extent, in the management of the Lembaga Pengelola SumberdayaTerumbu Karang-LPSTK (Coral Reef Management Body). Women made up 28% of the totalmembership in pokmas and accounted for 15% of the total number of LPSTK officers.Table 8: Financial Analysis of Bintan Fish Cracker Processing in Constant 2012 Prices(Rp ‘000)ItemYear 1 Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10Gross income142,500 142,500 142,500 142,500 142,500 142,500 142,500 142,500 142,500 57Production 7491,97491,974Total 13192,21992,131Net cash 6950,28150,369NPV @ 10%284,380NPV net present value.Source: ADB. 2012. Completion Report: Coral Reef Rehabilitation and Management Project Phase II in Indonesia.Manila.20.In the village of Malang Rapat, the fish cracker business is managed successfully by awomen’s group called Community Group (Pokmas) Bandeng. In 2010, Pokmas Bandengreceived considerable support from COREMAP II, which enabled the group to procureproduction equipment (gas tube, gas stove, freezer, cool box, and fish meat grinder). With thissupport starting from January 2011 for 4 consecutive months, the production increased to300kg/month with prices varying according to the type of fish (mackerel and other fish) betweenRp60,000 to 75,000 /kg. It is a household based enterprise that has received support from thelocal Fisheries Department. The LPSTK Malang Rapat has established a revolving fund, whichsupports its members and has invested substantial profits back into the enterprise. The marketsso far have mainly been the towns of Tanjung Pinang and Batam, to which there is easy access.21.The production group is poised to expand its business and has already invested inbuilding a storage facility; it produces under its own label and the product has been certified; thegroup now is in need of capital to expand and improve the kitchen facility, procure equipmentand tools to improve the diversity and quality of its products. Above all, it would benefit fromtechnical assistance in diversifying its products, exploring markets and value chain links in theASEAN region. Bintan’s proximity to Singapore and Malaysia is a potential asset to the groupfor linking up to larger markets.5.Socioeconomic Considerations22.The Bintan Regency consists of 10 subdistricts: Teluk Bintan, Seri Kuala Lobam, BintanUtara, Teluk Sebong, Bintan Timur, Bintan Pesisir, Mantang, Gunung Kijang, Toapaya, andTambelan (Table 9). Tambelan subdistrict is the farthest (360 km) from Kijang, the capital ofBintan located in Bintan Timur Subdistrict. There are 36 villages and 15 so-called urban villages.2ADB. 2012. Completion Report: Coral Reef Rehabilitation and Management Project Phase II in Indonesia.

9Table 9. Population distribution of Bintan administrative layah(km2)(Area)185JumlahDesaNo ofVillages5JumlahKelurahanNo of UrbanVillagesJumlah KK (# of HH)Teluk Bintan1Seri KualaLobam32Bintan Utara219.2514Teluk Sebong408.3461Bintan Timur461.0004Bintan belan169.427120101,946.13361520091,946.13Source: National Bureau of Statistics for Bintan. 2010. Jakarta.JumlahPenduduk(Individuals)%Laki-laki PerempuanPerempuan(Male)(Female)(% 7945.2%46.1%48.4%48.2%47.8%23.The population (see Figure 1) in 2010 was recorded at 142,300 with population densityat 73 persons per km2, an increase by 2,896 or 2.07%. The largest population was recorded inEast Bintan subdistrict at 39,006, but the most dense area is North Bintan subdistrict with 97persons per km2. Mantang subdistrict has the lowest population at 3,896.24.Distribution of male-female population is much lower for females at 48.2%, an increasefrom the 47.8% in 2009 despite zero maternal mortality. In 2010, Bintan recorded its availablehealth facilities: 1 Hospital, 12 Public Health Centers, 29 Supporting Public Health Centers, 15Outlying Health Centers, and 13 Medical Clinics.25.The percentage of literate population aged over 10 years was recorded at 95.52%.Schools distinctly have the regular curriculum and the Islamic. This is understandable as thepopulation by religion in Bintan consist of 86.47% Islam, 2.04% Catholic, 3.74% Protestant,0.27% Buddhist, 7.34% Hindu and 0.15% others religions.Figure 1. Population Distribution in Bintan Regency, 2010(Source: Bintan Dalam Angka/ Bintan in Figures 2011)

106.Subproject rationale26.Given need for protection of biodiversity (corals, coral reef fish, seagrass, dugong

have high cover and community efforts with GEF and UNEP support was undertaken in Trikora, 4 eastern Bintan to establish a seagrass sanctuary. Table 3. Percentage Cover and Diversity of Sea Grass Species in Gunung Kijang, Bint